Terna: The Grid Master Positioning to Profit from Italy’s Data Center Boom and Renewable Revolution

The Italian energy landscape is undergoing a seismic shift, driven by twin forces: a data center boom fueled by digital transformation and a renewable energy revolution aimed at decarbonizing the economy. At the heart of this transformation is Terna Rete Elettrica Nazionale (TRN), Italy’s sole high-voltage grid operator. With 42 GW of data center connection requests flooding its system—a 24-fold increase since 2021—and a legislative overhaul (Bill 1928) prioritizing grid modernization, Terna stands at the intersection of two of Europe’s most compelling infrastructure plays.

The Data Center Surge: A Grid Operator’s Golden Opportunity

Terna’s Q1 2025 results underscore its pivotal role. The company reported 5.1% year-on-year revenue growth, driven by surging demand for grid connections from data centers and renewable projects. With 257 active data center connection requests pending as of March 2025, Terna is now the gatekeeper to Italy’s rapidly expanding digital infrastructure. This isn’t just about electricity supply: data centers now account for 80% renewable energy use, with operators like Digital Realty and Equinix securing 100% green PPAs.

But the strain on Terna’s grid is real. Italy’s data center market is projected to grow at 30% annually, expanding capacity from 300 MW to 1–1.5 GW within five to seven years—a scale that threatens to overwhelm existing infrastructure. This is where Terna’s €23 billion 2025–2034 modernization plan comes into play.

Financial Resilience and Strategic CapEx: Building for the Future

Terna’s financial discipline is key to its long-term success. The company’s record CapEx—already up sharply from previous years—is funding game-changing projects like the Tyrrhenian Link (a €3.7 billion submarine HVDC cable) and the Adriatic Link, which will boost interconnection capacity between regions. These investments aren’t just about grid stability; they’re about monetizing the demand for reliable, renewable-powered infrastructure.

Regulatory Tailwinds: Bill 1928 and the Green Grid Revolution

Italy’s legislative reforms are eliminating barriers to growth. Bill 1928 streamlines permitting for data centers and renewables, addressing bureaucratic bottlenecks that have historically delayed grid connections. Terna’s CEO, Giuseppina Di Foggia, has called this bill “critical” to enabling the 70% renewable energy mix by 2030, which requires 250 GW of installed renewables—nearly triple today’s capacity.

The reforms also align with Terna’s MACSE storage procurement mechanism, designed to integrate battery storage and stabilize grids. By 2030, these upgrades are projected to cut CO₂ emissions by 12.1 million metric tons annually, positioning Terna as a linchpin of Italy’s climate goals.

Green PPAs: The Renewable Fuel for Growth

Terna’s partnerships with data center giants are underpinning its green transition. Take Data4’s 10-year PPA with Edision Energia, securing 500 GWh from a 148 MW solar park, or Equinix’s 53 MW solar deal with Neoen. These agreements not only ensure stable energy supply but also lower Terna’s carbon footprint, a critical advantage as regulators prioritize emissions reduction.

Risks? Yes. But the Upside Outweighs the Downside

Critics point to risks: grid strain from overloading, regulatory delays, and high energy costs. True, Terna’s monopoly as Italy’s sole grid operator could slow decision-making. Yet the company’s proactive CapEx, coupled with Bill 1928’s reforms, are addressing these head-on. Meanwhile, green hydrogen trials and hydrotreated vegetable oil (HVO) generators—already reducing emissions by 90% at Digital Realty sites—hint at future innovations to ease grid pressure.

Why Buy Terna Now?

Terna isn’t just a grid operator—it’s a strategic enabler of Italy’s digital and energy futures. With 5.1% revenue growth and a multi-decade modernization plan, it’s primed to capitalize on a data center market set to grow 30% annually and a renewable energy system needing €23 billion in upgrades.

For investors, the timing is ideal. Regulatory tailwinds, rising demand, and Terna’s dominant position mean this stock is poised to outperform as Italy transitions to a low-carbon economy. This is a once-in-a-decade opportunity to bet on the backbone of the energy revolution.

Act now—before the grid fills up.